No ITC on Share Buyback Expenses; Reversal Required on Common Inputs: AAR Gujarat

In re Gujarat Narmada Valley Fertilizers & Chemicals Limited (GST AAR Gujarat) Gujarat Authority for Advance Ruling (AAR) has denied Gujarat Narmada Valley Fertilizers & Chemicals Limited (GNFC) the benefit of Input Tax Credit (ITC) on expenses incurred for the buyback of shares. The company argued that buyback activities were undertaken in the course or furtherance of business and should qualify for ITC under Section 16 of the CGST Act, 2017. GNFC contended that costs related to professional fees, legal expenses, and other charges directly contributed to business objectives and were ...